The student loan bubble isn’t likely to end by government decree. Much like other failed lending programs, it’s likely to stop working as soon as demand for the loans abates significantly, whereas the trend over the last several years has been an enormous expansion in the demand for those loans.
The end will come due to selection effects. The people who focus on developing real job skills — and even the creative skills that college is sometimes supposed to inculcate — will continue to trounce many of the people who have shelled out for enormously expensive educations, even from some of the most prestigious universities. Parents who themselves went to college and have sent their own children through the system will continue to see that the system has degraded both in terms of the experience that it provides to students and in terms of the results that it fails to provide.
It’s not likely that any one thing — like internet college-level courses — will provide a replacement for the vast, mosty useless American education complex. Instead, institutions which have relied on ever increasing numbers of eager borrowers will begin to fail. The maintenance costs on extravagant campuses will not be able to bear decreasing enrollments. The huge payrolls of administrative staffs will not be supportable given even a dip in the overall increase in the interest in higher education.
The reversal isn’t that likely to be dramatic and sudden throughout the entire system. What’s more likely are local failures throughout the system, which will eventually cascade into a larger and more obvious failure. What the government might do in response to that is anyone’s guess. The record of the last 40 years suggests that the state will just try to lower the standards even further, increase enrollment even more, and reward failure with more enormous sums of money.
The changes in popular opinion over the last 10 years, though, while difficult to quantify, suggests that there’s more likely to be a contraction, but the stupidity of the bureaucratic left has been known to surprise.
None of this is particularly a problem for us or likely any of you. The more relevant question is what can pick up the shift in demand. The pat answer might be that ‘more people will go into the trades,’ but those trades can only absorb so many of the enormous numbers of largely useless graduates.
Rather than try to come up with a solution that works for the country as a whole — which would be impossible — it’s better to think more in terms of what you would do to increase the chances of your children succeeding. Historically, in times of serious resource restriction, a couple ways to handle that were:
- Strict gender roles
- Sending your children off to work for already established people
Some combination of both works well for people of all potentials, levels of intelligence, and most levels of scrupulousness. There’s no need to get more complex or institutionally-minded than that. There’s no grand proposal that can end the widespread middle class norms of extended ‘adolescence’ — but we can promote norms of early adult responsibility to counteract the errors of the last century.